The Manchester Office Agents Forum (MOAF) has recorded another strong end to the year with the final quarter figures taking overall take up in 2017 to 1.208m sq ft across 271 transactions, well above the 10-year average.
MOAF said the strong final quarter figures “are testament to the resilience of the Manchester office market. Strong demand for prime office accommodation has left the market with a record low supply of Grade A office space.”
With only c160,000 sq ft of Grade A accommodation presently available in the form of 101 Embankment, No 1 Spinningfields, 3 Hardman Square, 40 Spring Gardens and 2 St Peter’s Square, this year will present great opportunities for pro-active Landlords in delivering refurbished product to the market.
There are a number of Grade A schemes under construction to include Landmark (180,000 sq ft), 125 Deansgate (126,000 sq ft), Hanover, NOMA (90,000 sq ft), Circle Square (230,000 sq ft) and 11 York Street (80,000 sq ft), the majority of which will be delivered in mid-late 2019 providing for a pre-let market once the existing supply is absorbed.
Key transactions in 2017 include: 55,802 sq ft to We Work at No1 Spinningfields and 44,000 sq ft at One St Peters Square, 77,449 sq ft to DWP at 2 St Peters Square and Clyde & Co taking 69,000 sq ft at Manchester Royal Exchange.
Scott Shufflebottom, associate director at real estate advisors Colliers International, said: “The strong end to 2017 reinforces the sentiment of Manchester being the most active office market outside of London. The dust has yet to settle on the decision for the UK to leave the European Union but it is the collective view of MOAF that there will be no long term negative impact on the city centre office market. Due to the unrivalled quality of both the existing and proposed developments and the strong levels of demand from both indigenous and inward investing occupiers, we have full confidence that the rental market will continue to prosper.”
The now established Northern Powerhouse and devolution of powers from Whitehall has allowed for the continued growth of the city centre and wider Greater Manchester region. Substantial public funds have been committed to a number of significant infrastructure projects including the Ordsall Chord, Second City Crossing and Airport City and the delivery of such projects has and will continue to have far reaching benefits. Access to an extensive educated workforce through the numerous universities within Greater Manchester and an excellent transport network ensure that Manchester remains the pick of the regions for occupiers looking to open offices outside London.”
Salford Quays and Trafford performed strongly again with MOAF recording take up at 285,202 sq ft in 2017, the stand-out transaction involved Kellogg’s taking 48,120 sq ft at Orange, Media City.
South Manchester once again reported a strong year up 17% on 2016 with 641,000 sq ft transacted, an increase on the previous 3 consecutive years and once again above the 10-year average. In the second half of 2017, larger transactions including Laing O’Rourke, Biz Space and Assetz Capital ensured that it was a strong finish to the year.
Anthony Howcroft, Partner at Hallams Property Consultants, commented “The combined office take-up for the three recorded areas of Greater Manchester totals over 2.1 million sq ft, this firmly cements the region as the leading light outside of London. Continued investment in infrastructure and the growth of Manchester Airport ensure that the whole region not just the city centre are able to share in the success and attract quality occupiers to continue the trend of growth.”
Formed in 2009, MOAF members include Avison Young, BE Group, CBRE, Colliers International, Canning O’Neill, Cushman & Wakefield, Edwards & Co, GVA, Hallams Property Consultants, JLL, Knight Frank, LSH, Matthews & Goodman, OBI Property, Savills, Sixteen Real Estate, and TSG Property Consultants.